The amount of money councils were allocated in the provisional local government finance settlement was wrong, it has emerged.
Errors have been found in data used to calculate how much councils will either receive or have to pay in as part of the top up and tariff business rates system.
The Valuation Office Agency has admitted its figures were wrong and yesterday published revised statistics.
Councils receive a notification about how much they will have pay into or receive from the national business rates retention scheme as part of the local government finance settlement. Generally councils with larger incomes pay a tariff into a central pot while local authorities with smaller incomes receive a share from that pot.
However, errors in the VOA’s data meant calculations for how much each council should pay or receive were wrong.
A spokesman for the Ministry of Housing, Communities & Local Government said: “We have acted immediately to alert local authorities to the updated data and will be providing revised figures to enable authorities to finalise their budgets.”
Local Government Association chair Lord Porter (Con), said: “This unhelpful error by the VOA has added to the challenge facing councils when trying to set a budget for 2018-19.
“Councils now need urgent clarification of their allocations and the final settlement. The Treasury needs to use its central share of business rates to ensure that no council receives less than what they have been planning for in 2018-19 following the allocations published in the provisional settlement.”
However, Lord Porter added “none of this changes the fact that councils face a £5.8bn funding gap by 2020” and urged the government to “use the final settlement to provide new funding for all councils over the next few years so they can protect vital local services from further cutbacks.”
Claire Kober (Lab), chair of London Councils, said: “We welcome the clarification of these statistics, but are concerned about the lateness of the revision, given how close councils are to setting their budgets.
“The distribution of millions of pounds of public money depends on correct information from the VOA: the importance of this will only increase as the sector moves to 75% business rates retention from 2020-21.
“This error strengthens the case for the VOA’s work to be devolved to a local level to provide greater local accountability over its performance, give businesses greater certainty and confidence about their business rates bills and add more stability to funding for local services.”
A VOA spokesman said: “A fault in the process used to extract data from our systems has resulted in an error in our NDR [non-domestic rates] statistics, published in October 2017. The stats publication issued today corrects that. There is no question around the accuracy of our other statistics, all of which are produced in line with official statistics protocols.”